Mortgage

GSEs average 30% risky loan purchases

According to data gathered by the Federal Housing Finance Administration (FHFA), the government mortgage enterprises (mostly Fannie Mae and Freddie Mac) averaged 30% risky loan purchases from 2001-2008.

My definition of risky loan is 1) FICO score of less than 660 and 2) a low-to-value ratio of 80% or less.

This table is just for fixed-rate mortgages. Notice that Enterprise purchases peaked in 2003, but the percentage of risky purchases rose from 27.43% in 2005 to 36.79% in 2007.

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